For local coating enterprises, the bleak period of the industry is not a challenge. The real challenge is the forward-looking judgment and layout of the market.

Chatting with someone in the industry, he put forward a point of view to let BAMO answer, "now it can basically be said that the coating industry has encountered a" middle-aged crisis ", and will enter a deep adjustment period, which is saturation? What kind of adjustment and change will happen next?

In 2017 and the following period, the paint industry will be relatively bleak. The external performance is that the huge inventory digestion pressure and the second quarter, the third quarter (and the foreseeable fourth quarter) of 2017 will be at a low growth level.
BAMO can use eight words to describe the future prospect of the industry: "bright future, structural adjustment". As for the "middle age crisis", if we take a certain year in the early 1990s as the first year of the development of the coating industry, and the industry has only developed for more than 20 years, there is still a long way to go from the "40-50-year-old" middle age, let alone the crisis.
The coating industry has indeed entered a period of deep adjustment. However, the coating industry is still a sunrise industry, and China's huge infrastructure and real estate market is still very prosperous. In the future, with the improvement of the income level of Chinese residents and the development of the secondary renovation market, high-quality and cost-effective products will be more popular, so the consumption potential is great.

In a period of bleak industry environment, for local leading paint brands, although they also bear greater pressure, they are bleak "beneficiaries". In the period of in-depth adjustment of the industry, the "Matthew effect" of the stronger and the weaker will play a huge role; at the same time, the more intense or gloomy industry adjustment lasts, the longer it will squeeze more third and fourth tier brands out of the industry.

Several leading local companies have successively entered the capital market or considered entering the capital market. Their common characteristics are large scale, strong strength and abundant cash flow. The impact of the industry adjustment period on them is mostly limited to the slowdown of performance growth. However, from the sales report of the first quarter of 2017, some of the leading companies in China have increased significantly, which shows that the gloomy period of the industry is not a challenge but an opportunity for the leading companies.

After this stage is over, they will return to a better growth period (but cannot reach the high-speed growth level of the "golden decade") - the growth is partly due to the market share vacated by the "industry shuffle"; after that, the growth will fall back and the industry will enter a relatively stable development period.

In fact, coating companies with good performance growth in the first quarter of 2017 all share a common factor, that is, they have done a good job in the layout of product and brand transformation and upgrading as early as 2016, for example, the layout of zhanchen started ten years ago, and the same is true for companies such as bards, Chenyang water paint, and Maxus. Therefore, for local coating enterprises, the bleak period of the industry is not a challenge, the real challenge is the forward-looking judgment and layout of the market.

In this so-called "industry adjustment period", another real challenge comes from the strong penetration of international brands such as Nippon and Akzo Nobel. In the past, we always believed that the first and second tier markets belong to lipang, duluxi and other international brands, while the third and fourth tier markets belong to the base areas of local enterprises. However, with the strong penetration of lipang, duluxi and other international brands into the domestic second and third tier markets, international brands will occupy an advantage in the "base areas" of local leading brands through broader product lines, price bands and low positioning sub brands. The market "has a fierce and continuous competition with them.